Report from –
Damien Carr

27/8/2015

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The Department of Energy & Climate Change launched a consultation on 27 August as part of its policy to reduce the costs of renewables.

The consultation document states that FiTs has “exceeded all renewable energy deployment expectations” which has resulted in costs “exceeding our projections”. DECC says it is proposing a set of measures in order to avoid it breaching the Levy Control Framework (LCF), which is the amount of money that can be added to consumer bills to pay for low-carbon electricity generation.

The proposals include revised tariffs based on updated technology cost data, a more stringent digression mechanism and caps to the budget of between £75-100m leading to the phased closure of the scheme in 2018-19.

However, the scheme could be closed to new applicants as early as January 2016 if the proposed caps are “deemed unable to place the costs of the scheme on an affordable and sustainable trajectory”.

New Tariff bands

Current rate (Oct-Dec 2015) p/kWh

New proposed rate from Jan 2016 p/kWh

0-10kW

11.30-12.47

1.63

10-50kW

11.30

3.69

50-250kW

9.21-9.63

2.64

250kW-1MW

5.94

2.28

1MW-5MW

5.94

1.03

Standalone

4.28

1.03

Commenting on the announcement, Jonny Williams, Associate Director of the BRE National Solar Centre said: “Industry needs a steady flight path to zero subsidy, which is where we want to be, but the cuts proposed in the consultation are too much of a cliff edge and will threaten jobs and livelihoods. While the revision of banding for commercial roofs is positive, the overall proposals are too much too soon.”

His comments were reflected by Mike Landy, Head of Policy at Solar Trade Association, who also believed the threat of the scheme’s closure in January would cause a rush to market. “This is the antithesis of a sensible policy for achieving better public value for money while safeguarding the British solar industry,” he said.

Is there still a market for quality, low carbon homes and how can they be built cost effectively and efficiently?